AMP has experienced a turnaround in its wealth protection business for the financial year ending December 2014 after a number of challenges hindered its performance the previous year.
Reporting its financial results for 2014 – which saw the financial services provider post a net profit of $884 million – AMP saw an improvement in its life insurance business, experiencing an increase in operating earnings to $188 million, up from $64 million in 2013.
"The Australian life insurance market has been challenged by higher than expected claims and [policy lapses] over the past few years," a statement from AMP said.
"[This] has impacted on the profitability of the industry and of AMP's wealth protection business," it said.
Commenting on the improvement in the company's life insurance business, AMP chief executive Craig Meller explained the improvement was due to a decrease in lapse rates and better claims management processes over 2014.
“The wealth protection business is continuing to recover,” Mr Meller said.
“Whilst [our] lapse experience last year was a little better than [expected] there are no quick fixes for this issue.
“Our new approach to claims management has delivered a positive experience in income protection and our lapse experience was a little bit better than expected,” he said.
Mr Meller also pointed out that as “encouraging as these results are” there is still a lot more work to be done.
“There is no doubt that we have much more work to do in this business to make the changes we introduced last year sustainable and develop insurance solutions more compelling for consumers.
“So overall we are encouraged with the progress we have made in this business and setting it on the road to recovery but we still know we have more work to do,” he said.